Correlation Between Immersion and IDS France
Can any of the company-specific risk be diversified away by investing in both Immersion and IDS France at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Immersion and IDS France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immersion SA and IDS France SAS, you can compare the effects of market volatilities on Immersion and IDS France and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Immersion with a short position of IDS France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immersion and IDS France.
Diversification Opportunities for Immersion and IDS France
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Immersion and IDS is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Immersion SA and IDS France SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDS France SAS and Immersion is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Immersion SA are associated (or correlated) with IDS France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDS France SAS has no effect on the direction of Immersion i.e., Immersion and IDS France go up and down completely randomly.
Pair Corralation between Immersion and IDS France
If you would invest 49.00 in IDS France SAS on August 29, 2024 and sell it today you would earn a total of 0.00 from holding IDS France SAS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immersion SA vs. IDS France SAS
Performance |
| Timeline |
| Immersion SA |
| IDS France SAS |
Immersion and IDS France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immersion and IDS France
The main advantage of trading using opposite Immersion and IDS France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immersion position performs unexpectedly, IDS France can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IDS France will offset losses from the drop in IDS France's long position.The idea behind Immersion SA and IDS France SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IDS France vs. ACTEOS SA | IDS France vs. Coheris SA | IDS France vs. Hitechpros | IDS France vs. Immersion SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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